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a long-term incentive plan ltip is a compensation strategy employed by companies to reward employees for achieving long-term business objectives unlike traditional base salaries and annual bonuses ltips come with conditions that employees must fulfill over a specified period to receive the full benefit these plans are designed to align employee interests with the companys long-term goals attract and retain top talent and motivate employees to focus on Big Picture outcomes and overall business growth ltips are a crucial part of executive and key employee compensation packages they serve as deferred compensation based on specific performance goals over a defined period while they may not provide immediate cash rewards they offer substantial Financial incentives for achieving long-term objectives various types of ltips exist each tailored to an organizations goals and preferences some common forms of ltips include 401K plans restricted stock grants rsus and stock options 401K plans are